2011 Legislation

The 82nd Texas Legislature ended its regular session May 30, 2011. All probate, guardianship and trust bills passed during the session have been signed by the Governor, and most become effective September 1, 2011. One bill in the first called session (SB 1) contains guardianship changes and, as of July 8, 2011, was awaiting the Governor's signature. Each bill affecting probate, guardianship and trust law is listed below. Click here to search for a particular bill, or use the list of topics and key words to the right to find legislation.

Top Ten Things to Do Now -- Glenn Karisch's list of ten things estate planning and probate attorneys should do to address the legislative changes taking effect September 1, 2011. Here are the pdf and blog versions.

All bills are labeled "Awaiting Governor's Signature," "Enacted," or "Did Not Pass."____________________________________________________________________

Entries in Hartnett
(10)

Caption: Relating to the nonsubstantive revision of provisions of the Texas Probate Code relating to durable powers of attorney, guardianships, and other related proceedings and alternatives, and the redesignation of certain other provisions of the Texas Probate Code, including conforming amendments and repeals.Author: HartnettBill HistoryBill Text

Relevance: This is the recodification of the guardianship portion of the Probate Code, as well as the power of attorney portion of the Probate Code, into the new Estates Code, to be effective January 1, 2014. This is intended as a nonsubstantive revision of those statutes and was prepared by the Legislative Council.

Caption: Relating to guardianships and alternatives to guardianship for persons who have physical disabilities or who are incapacitated.Author: HartnettBill HistoryBill Text

Relevance: This bill is supported by the Real Estate, Probate and Trust Law Section of the State Bar of Texas. It makes multiple changes to the guardianship statutes in the Texas Probate Code. These include:

Changing the guardianship jurisdiction statutes in a way that is consistent to 2009's changes to the decedents' estates jurisdiction statutes. This is related to the enactment of the new Estates Code. (Sections 601, 605, 606A, 607A, 607B, 607C, 607D, 607E, and other technical changes)

Clarifies that an attorney ad litem appointed in a temporary guardianship continues to serve until a permanent guardian is appointed or the guardianship application is denied. (Section 646)

Eliminates the 5% of income and 5% of disbursement method of determining guardianship compensation in favor of a "reasonable compensation" standard. (Section 665)

Makes it easier for the conservator of an adult disabled child to obtain a guardianship of that child. (Section 682A)

Eliminates the need to list other co-owners of property on guardianship inventories. (Sections 729 and 730)

Clarifies that a guardianship of the estate shall be settled when all of the guardianship assets are transferred to a pooled trust subaccount. (Section 745)

In the settlement of a guardianship estate, the attorney ad litem's fees may be taxed as costs instead of automatically coming from the ward's estate. (Section 745)

Changes the maximum age for a guardian of a person to "voluntarily" admit the ward to an inpatient psychiatric facility from 16 to 18. (Section 770)

Makes it possible to apply to the court for permission to transfer a portion of the ward's estate "as necessary to qualify the ward for government benefits." (Section 865)

Permits a person with a physical disability only to apply for creation of a guardianship management trust (which may be necessary to qualify for governmental benefits). (Sections 867, 868, 868C, 869 and 870) The court cannot require the trustee of a trust created for a person with a physical disability only to file annual or final accountings. (Sections 871 and 873)

Requires the trustee of a guardianship management trust to file an "initial accounting" (the equivalent of an inventory) within 30 days after the date a trustee receives property. (Section 870A

Clarifies who can apply for the establishment of a pooled trust subaccount and who is eligible for a pooled trust subaccount. (Sections 910 and 911)

Caption: Relating to the creation, administration, and interpretation of powers of attorney, including statutory powers of attorney.Author: HartnettBill HistoryBill Text

Relevance: This bill is supported by the Real Estate, Probate and Trust Law Section of the State Bar of Texas. It is the "Durable Power of Attorney Act," which rewrites Texas law regarding durable powers of attorney. Most of these changes are based on the new Uniform Power of Attorney Act, which was adopted by the National Conference of Commissioners on Uniform State Laws in 2006. It changes the statutory durable power of attorney form significantly. The changes are too numerous to mention here, but here are a few highlights:

Powers of attorney are presumed to be durable unless they expressly terminate on disability.

The act lists the persons who have standing to bring an action to construe a power of attorney, review an agent's conduct or grant appropriate relief.

The point at which an agent accepts appointment is defined.

The act provides protections for persons accepting powers of attorney and consequences for persons who don't accept a power of attorney.

Agents are permitted to do the following only if the principal specifically authorizes these actions:

Create, amend, revoke, or terminate an inter vivos trust.

Make a gift.

Create or change rights of survivorship.

Create or change a beneficiary designation.

Waive the principal's right to be a beneficiary of a joint and survivor annuity.

There's a totally new statutory durable power of attorney form, which includes a disclosure statement and a statement of the agent's duties.

There's a new form for an agent's certification as to the validity of a power of attorney and the agent's authority.

This is a significant piece of legislation that will change power of attorney practice if it is enacted.

Relevance: This omnibus bill is supported by the Real Estate, Probate and Trust Law Section of the State Bar of Texas. It makes multiple changes to the Texas Probate Code affecting the estates of decedents. It also makes parallel changes to the new Estates Code. Changes include:

An option requiring only one signature of the testator and the witnesses on the will and self-proving affidavit (the old two-signature method still would be permitted). (Section 59)

Changes to the independent administration provisions of the Probate Code in anticipation of enactment of the new Estates Code, including addressing technical issues like the power of sale and creditor claims. (Sections 145 -- 151)

In independent administrations where there are no unpaid creditors, permitting the independent executor to deliver the inventory to the beneficiaries while filing an affidavit, not the inventory, with the court. (Section 250)

Changing the 5% of amounts collected/5% of certain payments method of determining the compensation of personal representatives to a "reasonable compensation" standard. (Section 241)

Confirming that a right of survivorship will not be presumed from joint ownership or joint tenancy of multi-party accounts and community property, legislatively overruling part of Holmes v. Beatty, saying "a survivorship agreement will not be inferred from the mere fact that the account is a joint account or that the account is designated JT TEN, Joint Tenancy, joint or other similar abbreviation." (Sections 439 and 452)

Caption: Relating to the recusal or disqualification of a statutory probate court judge and subsequent assignment of another judge.Author: HartnettBill HistoryBill Text

Relevance: In 2007, SB 406 amended Section 25.00255 of the Government Code to make the presiding judge of the administrative judicial district, not the presiding statutory probate judge, responsible for appointing judges to hear recusals of statutory probate judges and to hear the case if a statutory probate judge is recused. HB 2372 would give the presiding statutory probate judge the authority to appoint judges to hear recusals and to replace disqualified judges, but it would prohibit the presiding judge from appointing another statutory probate judge from the same county to hear recusal motions.

Relevance: This bill makes multiple changes to the decedents' estates portion of the probate code, including repealing Section 29 of the Probate Code, which exempted executors and administrators from the requirement to file an appeal bond, clarifying that there is no statute of limitations for determining heirship, permitting unsecured creditors to initiate probate proceedings (secured creditors already were permitted to do so), prohibiting severance of dueling will applications (both applications must be heard together), tinkering with the notice requirements for removal of independent executors and addressing the disposition of property distributable from an estate to an unknown or missing person.

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